Hiring activity in South Africa’s tech sector continues on a downward spiral, as global technology companies introduce a second round of layoffs.
This is according to the latest CareerJunction Employment Insights, which analyse supply and demand trends in the online job market, from data gathered from Saongroup South Africa, which works with over 5 000 of the country’s top recruiters.
According to the report, while hiring activity across various local sectors has increased by 2% year-on-year, from February 2022 to February 2023, recruitment in the tech sector paints a bleak picture.
“The technology sector is listed among sectors that have seen the biggest decline in hiring activity over the past three months, with a 14% drop in hiring across several verticals, including software development, data analysis, data warehousing, database design/data development and data administration roles.
“The decline in hiring activity was driven by a slowdown in recruitment across the information technology, and the admin, office and support roles – which saw a 17% decline,” notes CareerJunction.
The report shows a significant drop in job advertisements and hiring of these roles, as demand from companies slowed as the global wave of large-scale retrenchments continued unabated, with more companies introducing restructuring plans, which started late last year.
In its earlier report released in January, CareerJunction recorded a 6% month-on-month decline in hiring activity from November to December 2022 in the local tech sector.
This, as locally, companies such as Telkom, Naspers, Mara Phones and crypto platform Luno have announced layoffs this year.
The trend follows the growing global wave of large-scale retrenchments, which saw tech giants − including Google, Facebook parent Meta, Microsoft, IBM, Salesforce, Amazon, Dell, Indeed, Ericsson, Salesforce and SAP − moving to cull their workforce.
Of late, the retrenchment trend seems to have intensified, as companies such as Facebook and Amazon introduced a second round of retrenchments.
This week, Amazon announced it would cut 9 000 more jobs across the Twitch live-streaming business, Amazon Web Services, human resources and advertising units.
The announcement came after the e-commerce giant retrenched 18 000 workers in a restructuring process announced last year.
In a memo, published on Amazon’s corporate blog, CEO Andy Jassy explains: “Given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount.”
The Amazon announcement came less than a week after Meta announced it is looking to reduce its workforce by 10 000 and closing about 5 000 additional open roles.
This, after the company in November announced it was laying off 11 000 employees, about 13% of its workforce, as the company faces declining revenues.
In a memo to employees, Meta CEO Mark Zuckerberg says over the next couple of months, the social media company will announce restructuring plans focused on flattening the organisation, cancelling lower priority projects and reducing the hiring rate.
“With less hiring, I’ve made the difficult decision to further reduce the size of our recruiting team,” says Zuckerberg.
“We expect to announce restructuring and layoffs in our tech groups in late April, and then our business groups in late May.
Last month, Twitter laid off around 200 employees, following a mass layoff in early November, when new owner Elon Musk retrenched half of its workforce.
The global tech sector announced 97 171 job cuts in 2022, up 649% compared to the previous year, according to consulting firm Challenger, Gray & Christmas.
Layoffs at Alphabet, Microsoft, Amazon and IBM combined eliminated nearly 44 000 positions in January, it says.
OfferZen, SA’s largest developer job marketplace, in its 2023 SA report reveals the local market is absorbing the impact of a highly-volatile global tech climate. Combined with a tough macro-economic outlook for SA, 2023 looks set to be a challenging year for tech recruiters looking to hire software developers, it says.
The tech hiring spree that kicked off in 2021 slowed down significantly in 2022, with around 3% of South African developers retrenched last year, it notes.
“People and talent teams will need to do more with less: fewer people, less time to fill crucial roles and less budget. Sourcing high-quality candidates with the right mix of skills, experience, and salary early in the hiring process will be crucial to help companies weather the storm,” says OfferZen.
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